Attached files
| file | filename |
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| 8-K - 8-K - OCEANFIRST FINANCIAL CORP | ocfc8-kearningsrelease3x31.htm |
 | Press Release | |
Exhibit 99.1
Company Contact:
Michael J. Fitzpatrick
Chief Financial Officer
OceanFirst Financial Corp.
Tel: (732) 240-4500, ext. 7506
Email: Mfitzpatrick@oceanfirst.com
FOR IMMEDIATE RELEASE
OCEANFIRST FINANCIAL CORP.
ANNOUNCES FIRST QUARTER
FINANCIAL RESULTS
RED BANK, NEW JERSEY, April 26, 2018…OceanFirst Financial Corp. (NASDAQ:“OCFC”), (the “Company”), the holding company for OceanFirst Bank N.A. (the “Bank”), today announced that net income was $5.4 million and diluted earnings per share were $0.12 for the quarter ended March 31, 2018, as compared to $12.0 million and $0.36 for the corresponding prior year period.
The results of operations for the quarter ended March 31, 2018 include merger related expenses and branch consolidation expenses which decreased net income, net of tax benefit by $14.6 million. Excluding these items, core earnings for the quarter ended March 31, 2018 were $20.1 million, or $0.45 per diluted share. (Please refer to the Non-GAAP Reconciliation table at the end of this document for details on the earnings impact of merger related expenses and branch consolidation expenses). Highlights for the quarter are described below:
• | On January 31, 2018, the Company completed its acquisition of Sun Bancorp Inc. (“Sun”), the holding company of Sun National Bank, which added $2.0 billion to assets, $1.5 billion to loans, and $1.6 billion to deposits. The Company anticipates full integration of Sun’s operations and systems in June 2018. |
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• | The Company’s net interest margin increased to 3.70%, as compared to 3.42% in the prior linked quarter, and 3.56% in the comparable prior year period. |
• | The cost of deposits increased only one basis point from the prior linked quarter, to 0.33% and the loan to deposit ratio at March 31, 2018 was 91.7%. |
• | Asset quality improved as non-performing loans decreased $2.6 million, to $18.3 million, from the prior linked quarter and non-performing loans as a percentage of total loans receivable decreased to 0.34%, from 0.52%. |
Chairman and Chief Executive Officer, Christopher D. Maher said, “With Sun closing on January 31, 2018, we are pleased to include the stockholders, employees, and customers in the OceanFirst family. Sun branches and customers will be fully integrated into OceanFirst and the consolidation of overlapping branches will occur this June.” Mr. Maher added, “Throughout 2018, we will continue to focus on growth initiatives and improvements in operating efficiency.”
Substantial cost savings will be realized during the second half of 2018, due to Sun’s planned systems integration and the consolidation of 17 branches, primarily as a result of the merger. These initiatives will further allow the Company to continue to invest in commercial banking and electronic delivery channels while meeting efficiency targets established in connection with the recent acquisitions.
The Company also announced that the Company’s Board of Directors declared its eighty-fifth consecutive quarterly cash dividend on common stock. The dividend, for the quarter ended March 31, 2018, of $0.15 per share will be paid on May 18, 2018 to stockholders of record on May 7, 2018.
Results of Operations
On January 31, 2018, the Company completed its acquisition of Sun and its results of operations from February 1, 2018 to March 31, 2018 are included in the consolidated results for the quarter ended March 31, 2018, but are not included in the results of operations for the corresponding prior year periods.
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Net income for the quarter ended March 31, 2018, was $5.4 million, or $0.12 per diluted share, as compared to $12.0 million, or $0.36 per diluted share, for the corresponding prior year period. Net income for the quarter ended March 31, 2018, included merger related and branch consolidation expenses which decreased net income, net of tax benefit, by $14.6 million. Net income for the quarter ended March 31, 2017 included merger related and branch consolidation expenses, and an accelerated stock award expense from a director retirement, of $1.1 million, net of tax benefit. Excluding these items, net income for the quarter ended March 31, 2018 increased over the same prior year period, primarily due to the acquisition of Sun and the successful integration during 2017 of Ocean Shore Holding Co. (“Ocean Shore”) which was acquired on November 30, 2016.
Net interest income for the quarter ended March 31, 2018, increased to $55.7 million, as compared to $41.5 million for the same prior year period, reflecting an increase in interest-earning assets and a higher net interest margin. Average interest-earning assets increased by $1.378 billion for the quarter ended March 31, 2018, as compared to the same prior year period. The average for the quarter ended March 31, 2018, was favorably impacted by $1.174 billion of interest-earning assets acquired from Sun. Average loans receivable, net, increased by $1.139 billion for the quarter ended March 31, 2018, as compared to the same prior year period. The increase attributable to the acquisition of Sun was $989.5 million. The net interest margin for the quarter ended March 31, 2018 increased to 3.70%, from 3.56%, for the same prior year period. The net interest margin benefited from the accretion of purchase accounting adjustments on the Sun acquisition; and to a lesser extent, the higher-yielding interest-earning assets acquired from Sun and the impact of Federal Reserve rate increases. The total cost of deposits (including non-interest bearing deposits) was 0.33% for the quarter ended March 31, 2018, as compared to 0.27% in the same prior year period.
Net interest income for the quarter ended March 31, 2018, increased $13.2 million, as compared to the prior linked quarter, as average interest-earning assets increased by $1.178 billion, of which $1.174 billion is related to the Sun acquisition. The net interest margin increased to 3.70% for the quarter ended
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March 31, 2018, from 3.42% for the prior linked quarter. The increase in net interest margin was primarily due to a 15 basis point improvement in earning asset yield exclusive of Sun and related purchase accounting accretion, and 15 basis points of purchase accounting accretion relating to Sun. The total cost of deposits (including non-interest bearing deposits) was 0.33% for the quarter ended March 31, 2018, as compared to 0.32% for quarter ended December 31, 2017.
For the quarter ended March 31, 2018, the provision for loan losses was $1.4 million, as compared to $700,000 for the corresponding prior year period, and unchanged when compared to the prior linked quarter. Net loan charge-offs were $275,000 for the quarter ended March 31, 2018, as compared to net loan recoveries of $268,000 in the corresponding prior year period, and net loan charge-offs of $2.3 million in the prior linked quarter. For the quarter ended December 31, 2017, net charge-offs included $880,000 of specific reserves established in prior periods on non-performing loans and $1.1 million relating to the sale of under-performing loans; there were no sales of under-performing loans in the first quarter of 2018 that resulted in charge-offs. Non-performing loans totaled $18.3 million at March 31, 2018, as compared to $20.9 million at December 31, 2017, and $21.7 million at March 31, 2017. The decrease in non-performing loans from the prior linked quarter was primarily due to the sale of one commercial loan relationship.
For the quarter ended March 31, 2018, other income increased to $8.9 million as compared to $6.0 million for the corresponding prior year period. The increase was partly due to the impact of the Sun acquisition, which added $1.4 million to other income for the quarter ended March 31, 2018, as compared to the same prior year period. Excluding the Sun acquisition, the remaining increase in other income for the quarter ended March 31, 2018, was primarily due to the gain on sale of loans of $613,000, mostly related to the sale of one non-performing commercial loan relationship, rental income of $460,000 received for January and February 2018 on the Company’s recently acquired corporate headquarters (the building was occupied by the former owner through February 2018), and the decrease in the net loss from other real estate operations of $321,000, as compared to the same prior year period.
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For the quarter ended March 31, 2018, other income increased by $2.2 million, as compared to the prior linked quarter. The increase is primarily due to the impact of the Sun acquisition and the gain on sale of loans.
Operating expenses increased to $56.8 million for the quarter ended March 31, 2018, as compared to $31.0 million in the same prior year period. Operating expenses for the quarter ended March 31, 2018, included $18.3 million of merger related and branch consolidation expenses, as compared to $1.5 million in the same prior year period. Excluding the impact of merger and branch consolidation expenses, the increase in operating expenses over the prior year was primarily due to the Sun acquisition, which added $8.0 million for the quarter ended March 31, 2018. Excluding the Sun acquisition, the remaining increase in operating expenses over the prior year period was primarily due to increases in compensation and employee benefits expense as a result of higher incentive plan expense, and occupancy expense, partly due to costs of snow removal.
For the quarter ended March 31, 2018, operating expenses, excluding merger and branch consolidation expenses, increased $12.1 million, as compared to the prior linked quarter. The increase was primarily related to the additional expense from the operations of Sun, as well as increases in compensation and employee benefits expense, primarily higher incentive plan expense and higher salary, data processing expense and occupancy expense, partly due to costs of snow removal.
The provision for income taxes was $1.0 million for the quarter ended March 31, 2018, as compared to $3.8 million for the same prior year period. The effective tax rate was 15.6% for the quarter ended March 31, 2018, as compared to 24.0% for the same prior year period. The lower effective tax rate for the quarter ended March 31, 2018 resulted from the Tax Cuts and Jobs Act (“Tax Reform”) enacted during the fourth quarter of 2017 and the larger impact of tax-exempt income on the smaller income before taxes.
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Financial Condition
Total assets increased by $2.079 billion, to $7.495 billion at March 31, 2018, from $5.416 billion at December 31, 2017, primarily as a result of the acquisition of Sun, which added $2.045 billion to total assets. Loans receivable, net, increased by $1.448 billion, to $5.414 billion at March 31, 2018 from $3.966 billion at December 31, 2017, due to acquired loans of $1.518 billion from the acquisition of Sun. As part of the acquisition of Sun, the Company’s goodwill balance increased to $337.5 million at March 31, 2018, from $150.5 million, and the core deposit intangible increased to $20.0 million, from $8.9 million.
Deposits increased by $1.565 billion, to $5.907 billion at March 31, 2018, from $4.343 billion at December 31, 2017, due to acquired deposits of $1.616 billion. The loan-to-deposit ratio at March 31, 2018 was 91.7%, as compared to 91.3% at December 31, 2017.
Stockholders’ equity increased to $1.007 billion at March 31, 2018, as compared to $601.9 million at December 31, 2017. The acquisition of Sun added $402.6 million to stockholders’ equity. At March 31, 2018, there were 1.8 million shares available for repurchase under the Company’s stock repurchase programs. For the quarter ended March 31, 2018, the Company did not repurchase any shares under these repurchase programs. Tangible stockholders’ equity per common share decreased to $13.51 at March 31, 2018, as compared to $13.58 at December 31, 2017.
Asset Quality
The Company’s non-performing loans decreased to $18.3 million at March 31, 2018, as compared to $20.9 million at December 31, 2017. The decrease was primarily due to the sale of one commercial loan relationship. Non-performing loans do not include $14.4 million of purchased credit-impaired (“PCI”) loans acquired in the Sun, Ocean Shore, Cape Bancorp, Inc. (“Cape”), and Colonial American Bank (“Colonial American”) acquisitions (“Acquisition Transactions”). The Company’s other real estate owned totaled $8.3 million at March 31, 2018, as compared to $8.2 million at December 31, 2017.
The Company’s delinquent loans 30 - 89 days were $35.4 million at March 31, 2018, as compared to $20.8 million at December 31, 2017. The increase was related to one $15.0 million commercial
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relationship which was in the process of renewal at March 31, 2018. Subsequent to quarter-end, the renewal process was completed and the loan returned to current status.
At March 31, 2018, the Company’s allowance for loan losses was 0.31% of total loans, a decrease from 0.40% at December 31, 2017. These ratios exclude existing fair value credit marks of $40.7 million at March 31, 2018 on loans acquired from the Acquisition Transactions, and $17.5 million at December 31, 2017 on loans acquired from Ocean Shore, Cape and Colonial American. These loans were acquired at fair value with no related allowance for loan losses. The allowance for loan losses as a percent of total non-performing loans was 92.14% at March 31, 2018 as compared to 75.35% at December 31, 2017.
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Explanation of Non-GAAP Financial Measures
Reported amounts are presented in accordance with generally accepted accounting principles in the United States (“GAAP”). The Company’s management believes that the supplemental non-GAAP information, which consists of reported net income excluding merger related expenses, branch consolidation expenses, additional income tax expense related to Tax Reform enacted in the fourth quarter of 2017, and accelerated stock award expense relating to a director retirement, which can vary from period to period, provides a better comparison of period to period operating performance. Additionally, the Company believes this information is utilized by regulators and market analysts to evaluate a company’s financial condition and therefore, such information is useful to investors. These disclosures should not be viewed as a substitute for financial results in accordance with GAAP, nor are they necessarily comparable to non-GAAP performance measures which may be presented by other companies. Please refer to Non-GAAP Reconciliation table at the end of this document for details on the earnings impact of these items.
Conference Call
As previously announced, the Company will host an earnings conference call on Friday, April 27, 2018 at 11 a.m. Eastern time. The direct dial number for the call is (888) 338-7143. For those unable to participate in the conference call, a replay will be available. To access the replay, dial (877) 344-7529, Replay Conference Number 10118488 from one hour after the end of the call until July 27, 2018. The conference call, as well as the replay, are also available (listen-only) by internet webcast at www.oceanfirst.com in the Investor Relations section.
* * *
OceanFirst Financial Corp.’s subsidiary, OceanFirst Bank, founded in 1902, is a $7.5 billion community bank with branches located throughout central and southern New Jersey. OceanFirst Bank delivers commercial and residential financing solutions, wealth management and deposit services and is one of the largest and oldest community-based financial institutions headquartered in New Jersey.
OceanFirst Financial Corp.’s press releases are available by visiting us at www.oceanfirst.com.
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Forward-Looking Statements
In addition to historical information, this news release contains certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 which are based on certain assumptions and describe future plans, strategies and expectations of the Company. These forward-looking statements are generally identified by use of the words “believe,” “expect,” “intend,” “anticipate,” “estimate,” “project,” “will,” “should,” “may,” “view,” “opportunity,” “potential,” or similar expressions or expressions of confidence. The Company’s ability to predict results or the actual effect of future plans or strategies is inherently uncertain. Factors which could have a material adverse effect on the operations of the Company and its subsidiaries include, but are not limited to: changes in interest rates, general economic conditions, levels of unemployment in the Bank’s lending area, real estate market values in the Bank’s lending area, future natural disasters and increases to flood insurance premiums, the level of prepayments on loans and mortgage-backed securities, legislative/regulatory changes, monetary and fiscal policies of the U.S. Government including policies of the U.S. Treasury and the Board of Governors of the Federal Reserve System, the quality or composition of the loan or investment portfolios, demand for loan products, deposit flows, competition, demand for financial services in the Company’s market area, accounting principles and guidelines and the Bank’s ability to successfully integrate acquired operations. These risks and uncertainties are further discussed in the Company’s Annual Report on Form 10-K for the year ended December 31, 2017, under Item 1A - Risk Factors and elsewhere, and subsequent securities filings and should be considered in evaluating forward-looking statements and undue reliance should not be placed on such statements. The Company does not undertake, and specifically disclaims any obligation, to publicly release the result of any revisions which may be made to any forward-looking statements to reflect events or circumstances after the date of such statements or to reflect the occurrence of anticipated or unanticipated events.
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OceanFirst Financial Corp.
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
(dollars in thousands, except per share amounts)
March 31, 2018 | December 31, 2017 | March 31, 2017 | ||||||||||
(Unaudited) | (Unaudited) | |||||||||||
Assets | ||||||||||||
Cash and due from banks | $ | 119,364 | $ | 109,613 | $ | 175,252 | ||||||
Debt securities available-for-sale, at estimated fair value | 86,114 | 81,581 | 47,104 | |||||||||
Debt securities held-to-maturity, net (estimated fair value of $971,399 at March 31, 2018, $761,660 at December 31, 2017, and $695,564 at March 31, 2017) | 982,857 | 764,062 | 687,098 | |||||||||
Equity investments, at estimated fair value | 9,565 | 8,700 | 8,588 | |||||||||
Restricted equity investments, at cost | 50,418 | 19,724 | 19,253 | |||||||||
Loans receivable, net | 5,413,780 | 3,965,773 | 3,825,600 | |||||||||
Loans held-for-sale | 167 | 241 | 283 | |||||||||
Interest and dividends receivable | 19,422 | 14,254 | 12,258 | |||||||||
Other real estate owned | 8,265 | 8,186 | 8,774 | |||||||||
Premises and equipment, net | 121,835 | 101,776 | 70,806 | |||||||||
Bank Owned Life Insurance | 218,673 | 134,847 | 132,789 | |||||||||
Deferred tax asset | 60,136 | 1,922 | 33,747 | |||||||||
Assets held for sale | 3,147 | 4,046 | 360 | |||||||||
Other assets | 43,687 | 41,895 | 16,076 | |||||||||
Core deposit intangible | 19,950 | 8,885 | 10,400 | |||||||||
Goodwill | 337,519 | 150,501 | 147,815 | |||||||||
Total assets | $ | 7,494,899 | $ | 5,416,006 | $ | 5,196,203 | ||||||
Liabilities and Stockholders’ Equity | ||||||||||||
Deposits | $ | 5,907,336 | $ | 4,342,798 | $ | 4,198,663 | ||||||
Federal Home Loan Bank advances | 341,646 | 288,691 | 250,021 | |||||||||
Securities sold under agreements to repurchase with retail customers | 82,463 | 79,668 | 77,207 | |||||||||
Other borrowings | 99,359 | 56,519 | 56,591 | |||||||||
Advances by borrowers for taxes and insurance | 11,974 | 11,156 | 14,876 | |||||||||
Other liabilities | 44,661 | 35,233 | 16,302 | |||||||||
Total liabilities | 6,487,439 | 4,814,065 | 4,613,660 | |||||||||
Stockholders’ equity: | ||||||||||||
Preferred stock, $.01 par value, $1,000 liquidation preference, 5,000,000 shares authorized, no shares issued | — | — | — | |||||||||
Common stock, $.01 par value, 55,000,000 shares authorized, 48,105,623 shares issued and 48,105,623, 32,596,893, and 32,465,413 shares outstanding at March 31, 2018, December 31, 2017, and March 31, 2017, respectively | 481 | 336 | 336 | |||||||||
Additional paid-in capital | 751,695 | 354,377 | 352,316 | |||||||||
Retained earnings | 262,779 | 271,023 | 256,045 | |||||||||
Accumulated other comprehensive loss | (5,306 | ) | (5,349 | ) | (5,519 | ) | ||||||
Less: Unallocated common stock held by Employee Stock Ownership Plan | (2,189 | ) | (2,479 | ) | (2,690 | ) | ||||||
Treasury stock, 0, 969,879, and 1,101,359 shares at March 31, 2018, December 31, 2017, and March 31, 2017, respectively | — | (15,967 | ) | (17,945 | ) | |||||||
Common stock acquired by Deferred Compensation Plan | (84 | ) | (84 | ) | (316 | ) | ||||||
Deferred Compensation Plan Liability | 84 | 84 | 316 | |||||||||
Total stockholders’ equity | 1,007,460 | 601,941 | 582,543 | |||||||||
Total liabilities and stockholders’ equity | $ | 7,494,899 | $ | 5,416,006 | $ | 5,196,203 | ||||||
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OceanFirst Financial Corp.
CONSOLIDATED STATEMENTS OF INCOME
(in thousands, except per share amounts)
For the Three Months Ended, | ||||||||||||
March 31, 2018 | December 31, 2017 | March 31, 2017 | ||||||||||
|-------------------- (unaudited) --------------------| | ||||||||||||
Interest income: | ||||||||||||
Loans | $ | 56,598 | $ | 42,909 | $ | 41,742 | ||||||
Mortgage-backed securities | 3,685 | 2,919 | 2,660 | |||||||||
Debt securities, equity investments and other | 2,554 | 2,078 | 1,612 | |||||||||
Total interest income | 62,837 | 47,906 | 46,014 | |||||||||
Interest expense: | ||||||||||||
Deposits | 4,464 | 3,515 | 2,781 | |||||||||
Borrowed funds | 2,662 | 1,886 | 1,750 | |||||||||
Total interest expense | 7,126 | 5,401 | 4,531 | |||||||||
Net interest income | 55,711 | 42,505 | 41,483 | |||||||||
Provision for loan losses | 1,371 | 1,415 | 700 | |||||||||
Net interest income after provision for loan losses | 54,340 | 41,090 | 40,783 | |||||||||
Other income: | ||||||||||||
Bankcard services revenue | 1,919 | 1,764 | 1,579 | |||||||||
Wealth management revenue | 553 | 528 | 516 | |||||||||
Fees and service charges | 4,674 | 3,891 | 3,807 | |||||||||
Net gain on sales of loans | 617 | 26 | 42 | |||||||||
Net unrealized loss on equity investments | (138 | ) | — | — | ||||||||
Net loss from other real estate operations | (412 | ) | (678 | ) | (733 | ) | ||||||
Income from Bank Owned Life Insurance | 1,141 | 863 | 772 | |||||||||
Other | 556 | 351 | 12 | |||||||||
Total other income | 8,910 | 6,745 | 5,995 | |||||||||
Operating expenses: | ||||||||||||
Compensation and employee benefits | 21,251 | 13,961 | 16,138 | |||||||||
Occupancy | 4,567 | 2,693 | 2,767 | |||||||||
Equipment | 1,903 | 1,763 | 1,698 | |||||||||
Marketing | 561 | 433 | 740 | |||||||||
Federal deposit insurance | 930 | 485 | 661 | |||||||||
Data processing | 3,176 | 2,040 | 2,396 | |||||||||
Check card processing | 989 | 922 | 953 | |||||||||
Professional fees | 1,283 | 1,094 | 960 | |||||||||
Other operating expense | 3,016 | 2,548 | 2,644 | |||||||||
Amortization of core deposit intangible | 832 | 495 | 524 | |||||||||
Branch consolidation (income) expense | (176 | ) | (734 | ) | 33 | |||||||
Merger related expenses | 18,486 | 1,993 | 1,447 | |||||||||
Total operating expenses | 56,818 | 27,693 | 30,961 | |||||||||
Income before provision for income taxes | 6,432 | 20,142 | 15,817 | |||||||||
Provision for income taxes | 1,005 | 10,186 | 3,799 | |||||||||
Net income | $ | 5,427 | $ | 9,956 | $ | 12,018 | ||||||
Basic earnings per share | $ | 0.12 | $ | 0.31 | $ | 0.38 | ||||||
Diluted earnings per share | $ | 0.12 | $ | 0.30 | $ | 0.36 | ||||||
Average basic shares outstanding | 43,880 | 32,225 | 31,901 | |||||||||
Average diluted shares outstanding | 44,846 | 33,168 | 33,090 | |||||||||
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OceanFirst Financial Corp.
SELECTED LOAN AND DEPOSIT DATA
(dollars in thousands)
LOANS RECEIVABLE | At | |||||||||||||||||||||
March 31, 2018 | December 31, 2017 | September 30, 2017 | June 30, 2017 | March 31, 2017 | ||||||||||||||||||
Commercial: | ||||||||||||||||||||||
Commercial and industrial | $ | 370,711 | $ | 187,645 | $ | 183,510 | $ | 193,759 | $ | 205,720 | ||||||||||||
Commercial real estate - owner - occupied | 763,261 | 569,624 | 555,429 | 557,734 | 533,052 | |||||||||||||||||
Commercial real estate - investor | 2,034,708 | 1,187,482 | 1,134,416 | 1,122,186 | 1,113,964 | |||||||||||||||||
Total commercial | 3,168,680 | 1,944,751 | 1,873,355 | 1,873,679 | 1,852,736 | |||||||||||||||||
Consumer: | ||||||||||||||||||||||
Residential real estate | 1,882,981 | 1,748,925 | 1,729,358 | 1,723,581 | 1,698,620 | |||||||||||||||||
Home equity loans and lines | 371,340 | 281,143 | 277,909 | 282,402 | 285,149 | |||||||||||||||||
Other consumer | 1,844 | 1,295 | 1,426 | 1,335 | 1,560 | |||||||||||||||||
Total consumer | 2,256,165 | 2,031,363 | 2,008,693 | 2,007,318 | 1,985,329 | |||||||||||||||||
Total loans | 5,424,845 | 3,976,114 | 3,882,048 | 3,880,997 | 3,838,065 | |||||||||||||||||
Deferred origination costs, net | 5,752 | 5,380 | 4,645 | 4,365 | 3,686 | |||||||||||||||||
Allowance for loan losses | (16,817 | ) | (15,721 | ) | (16,584 | ) | (16,557 | ) | (16,151 | ) | ||||||||||||
Loans receivable, net | $ | 5,413,780 | $ | 3,965,773 | $ | 3,870,109 | $ | 3,868,805 | $ | 3,825,600 | ||||||||||||
Mortgage loans serviced for others | $ | 109,273 | $ | 121,662 | $ | 121,886 | $ | 131,284 | $ | 132,973 | ||||||||||||
At March 31, 2018 Average Yield | ||||||||||||||||||||||
Loan pipeline (1): | ||||||||||||||||||||||
Commercial | 5.00 | % | $ | 71,982 | $ | 53,859 | $ | 58,189 | $ | 61,287 | $ | 73,793 | ||||||||||
Residential mortgage and construction | 4.18 | 73,513 | 43,482 | 44,510 | 64,510 | 57,600 | ||||||||||||||||
Home equity loans and lines | 5.05 | 11,338 | 7,412 | 8,826 | 11,194 | 7,879 | ||||||||||||||||
Total | 4.62 | % | $ | 156,833 | $ | 104,753 | $ | 111,525 | $ | 136,991 | $ | 139,272 | ||||||||||
For the Three Months Ended | ||||||||||||||||||||||
March 31, 2018 | December 31, 2017 | September 30, 2017 | June 30, 2017 | March 31, 2017 | ||||||||||||||||||
Average Yield | ||||||||||||||||||||||
Loan originations: | ||||||||||||||||||||||
Commercial | 4.71 | % | $ | 59,150 | $ | 141,346 | $ | 97,420 | $ | 115,048 | $ | 106,896 | ||||||||||
Residential mortgage and construction | 3.74 | 68,835 | 73,729 | 80,481 | 79,610 | 64,452 | ||||||||||||||||
Home equity loans and lines | 4.79 | 14,891 | 18,704 | 17,129 | 20,539 | 12,500 | ||||||||||||||||
Total | 4.25 | % | $ | 142,876 | $ | 233,779 | $ | 195,030 | $ | 215,197 | $ | 183,848 | ||||||||||
Loans sold | $ | 241 | (2) | $ | 1,422 | (3) | $ | 991 | (4) | $ | 865 | (5) | $ | 1,907 | ||||||||
(1) | Loan pipeline includes pending loan applications and loans approved but not funded |
(2) | Excludes the sale of SBA loans acquired from Sun and under-performing loans totaling $8.5 million |
(3) | Excludes the sale of under-performing residential loans of $5.8 million |
(4) | Excludes the sale of under-performing residential loans of $3.5 million |
(5) | Excludes the sale of under-performing residential loans of $4.3 million |
DEPOSITS | At | ||||||||||||||||||
March 31, 2018 | December 31, 2017 | September 30, 2017 | June 30, 2017 | March 31, 2017 | |||||||||||||||
Type of Account | |||||||||||||||||||
Non-interest-bearing | $ | 1,117,100 | $ | 756,513 | $ | 781,043 | $ | 770,057 | $ | 806,728 | |||||||||
Interest-bearing checking | 2,330,682 | 1,954,358 | 1,892,832 | 1,727,828 | 1,629,589 | ||||||||||||||
Money market deposit | 613,183 | 363,656 | 384,106 | 378,538 | 448,093 | ||||||||||||||
Savings | 917,288 | 661,167 | 668,370 | 677,939 | 681,853 | ||||||||||||||
Time deposits | 929,083 | 607,104 | 623,908 | 622,547 | 632,400 | ||||||||||||||
$ | 5,907,336 | $ | 4,342,798 | $ | 4,350,259 | $ | 4,176,909 | $ | 4,198,663 | ||||||||||
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OceanFirst Financial Corp.
ASSET QUALITY
(dollars in thousands)
ASSET QUALITY | March 31, 2018 | December 31, 2017 | September 30, 2017 | June 30, 2017 | March 31, 2017 | ||||||||||||||
Non-performing loans: | |||||||||||||||||||
Commercial and industrial | $ | 1,717 | $ | 503 | $ | 63 | $ | 68 | $ | 231 | |||||||||
Commercial real estate - owner-occupied | 862 | 5,962 | 923 | 943 | 2,383 | ||||||||||||||
Commercial real estate - investor | 7,994 | 8,281 | 8,720 | 5,608 | 5,118 | ||||||||||||||
Residential mortgage | 5,686 | 4,190 | 3,551 | 7,936 | 11,993 | ||||||||||||||
Home equity loans and lines | 1,992 | 1,929 | 1,864 | 1,706 | 1,954 | ||||||||||||||
Total non-performing loans | 18,251 | 20,865 | 15,121 | 16,261 | 21,679 | ||||||||||||||
Other real estate owned | 8,265 | 8,186 | 9,334 | 8,898 | 8,774 | ||||||||||||||
Total non-performing assets | $ | 26,516 | $ | 29,051 | $ | 24,455 | $ | 25,159 | $ | 30,453 | |||||||||
Purchased credit-impaired (“PCI”) loans | $ | 14,352 | $ | 1,712 | $ | 4,867 | $ | 4,969 | $ | 7,118 | |||||||||
Delinquent loans 30 to 89 days | $ | 35,431 | (1) | $ | 20,796 | $ | 24,548 | $ | 25,224 | $ | 18,516 | ||||||||
Troubled debt restructurings: | |||||||||||||||||||
Non-performing (included in total non-performing loans above) | $ | 4,306 | $ | 8,821 | $ | 270 | $ | 1,251 | $ | 3,547 | |||||||||
Performing | 33,806 | 33,313 | 35,808 | 34,130 | 26,974 | ||||||||||||||
Total troubled debt restructurings | $ | 38,112 | $ | 42,134 | $ | 36,078 | $ | 35,381 | $ | 30,521 | |||||||||
Allowance for loan losses | $ | 16,817 | $ | 15,721 | $ | 16,584 | $ | 16,557 | $ | 16,151 | |||||||||
Allowance for loan losses as a percent of total loans receivable (2) | 0.31 | % | 0.40 | % | 0.42 | % | 0.42 | % | 0.42 | % | |||||||||
Allowance for loan losses as a percent of total non-performing loans | 92.14 | 75.35 | 109.68 | 101.82 | 74.50 | ||||||||||||||
Non-performing loans as a percent of total loans receivable | 0.34 | 0.52 | 0.39 | 0.42 | 0.56 | ||||||||||||||
Non-performing assets as a percent of total assets | 0.35 | 0.54 | 0.45 | 0.48 | 0.59 | ||||||||||||||
(1) | One commercial loan relationship, for $15.0 million, was in the process of renewal at March 31, 2018. Subsequent to quarter-end, the renewal process was completed and the loan returned to current status. |
(2) | The loans acquired from Sun, Ocean Shore, Cape, and Colonial American were recorded at fair value. The net credit mark on these loans, not reflected in the allowance for loan losses, was $40,717, $17,531, $19,810, $21,794, and $24,002 at March 31, 2018, December 31, 2017, September 30, 2017, June 30, 2017, and March 31, 2017, respectively. |
NET CHARGE-OFFS | For the Three Months Ended | ||||||||||||||||||
March 31, 2018 | December 31, 2017 | September 30, 2017 | June 30, 2017 | March 31, 2017 | |||||||||||||||
Net Charge-offs: | |||||||||||||||||||
Loan charge-offs | $ | (533 | ) | $ | (2,523 | ) | $ | (1,357 | ) | $ | (1,299 | ) | $ | (205 | ) | ||||
Recoveries on loans | 258 | 245 | 219 | 540 | 473 | ||||||||||||||
Net loan (charge-offs) recoveries | $ | (275 | ) | $ | (2,278 | ) | $ | (1,138 | ) | $ | (759 | ) | $ | 268 | |||||
Net loan charge-offs to average total loans (annualized) | 0.02 | % | 0.23 | % | 0.12 | % | 0.08 | % | NM* | ||||||||||
Net charge-off detail - (loss) recovery: | |||||||||||||||||||
Commercial | $ | (10 | ) | $ | (1,036 | ) | $ | 68 | $ | (81 | ) | $ | 311 | ||||||
Residential mortgage and construction | (159 | ) | (1,262 | ) | (1,156 | ) | (716 | ) | (49 | ) | |||||||||
Home equity loans and lines | (99 | ) | 28 | (51 | ) | 39 | 24 | ||||||||||||
Other consumer | (7 | ) | (8 | ) | 1 | (1 | ) | (18 | ) | ||||||||||
Net loan (charge-offs) recoveries | $ | (275 | ) | $ | (2,278 | ) | $ | (1,138 | ) | $ | (759 | ) | $ | 268 | |||||
* Not meaningful
13
OceanFirst Financial Corp.
ANALYSIS OF NET INTEREST INCOME
For the Three Months Ended | ||||||||||||||||||||||||||||||||
March 31, 2018 | December 31, 2017 | March 31, 2017 | ||||||||||||||||||||||||||||||
(dollars in thousands) | Average Balance | Interest | Average Yield/ Cost | Average Balance | Interest | Average Yield/ Cost | Average Balance | Interest | Average Yield/ Cost | |||||||||||||||||||||||
Assets: | ||||||||||||||||||||||||||||||||
Interest-earning assets: | ||||||||||||||||||||||||||||||||
Interest-earning deposits and short-term investments | $ | 100,236 | $ | 209 | 0.84 | % | $ | 155,987 | $ | 391 | 0.99 | % | $ | 214,165 | $ | 409 | 0.77 | % | ||||||||||||||
Securities (1) | 1,056,774 | 6,030 | 2.31 | 874,910 | 4,606 | 2.09 | 703,712 | 3,863 | 2.23 | |||||||||||||||||||||||
Loans receivable, net (2) | ||||||||||||||||||||||||||||||||
Commercial | 2,772,952 | 33,391 | 4.88 | 1,887,319 | 22,087 | 4.64 | 1,830,641 | 21,140 | 4.68 | |||||||||||||||||||||||
Residential | 1,843,804 | 19,037 | 4.19 | 1,743,334 | 17,552 | 3.99 | 1,704,035 | 17,339 | 4.13 | |||||||||||||||||||||||
Home Equity | 342,078 | 4,143 | 4.91 | 278,294 | 3,243 | 4.62 | 287,335 | 3,245 | 4.58 | |||||||||||||||||||||||
Other | 1,458 | 27 | 7.51 | 1,086 | 27 | 9.86 | 1,248 | 18 | 5.85 | |||||||||||||||||||||||
Allowance for loan loss net of deferred loan fees | (10,285 | ) | — | — | (11,993 | ) | — | — | (12,123 | ) | — | — | ||||||||||||||||||||
Loans Receivable, net | 4,950,007 | 56,598 | 4.64 | 3,898,040 | 42,909 | 4.37 | 3,811,136 | 41,742 | 4.44 | |||||||||||||||||||||||
Total interest-earning assets | 6,107,017 | 62,837 | 4.17 | 4,928,937 | 47,906 | 3.86 | 4,729,013 | 46,014 | 3.95 | |||||||||||||||||||||||
Non-interest-earning assets | 735,676 | 475,927 | 482,058 | |||||||||||||||||||||||||||||
Total assets | $ | 6,842,693 | $ | 5,404,864 | $ | 5,211,071 | ||||||||||||||||||||||||||
Liabilities and Stockholders’ Equity: | ||||||||||||||||||||||||||||||||
Interest-bearing liabilities: | ||||||||||||||||||||||||||||||||
Interest-bearing checking | $ | 2,263,318 | 1,758 | 0.32 | % | $ | 1,944,223 | 1,447 | 0.30 | % | $ | 1,668,545 | 876 | 0.21 | % | |||||||||||||||||
Money market | 525,933 | 550 | 0.42 | 385,720 | 322 | 0.33 | 445,186 | 311 | 0.28 | |||||||||||||||||||||||
Savings | 825,044 | 195 | 0.10 | 662,318 | 59 | 0.04 | 674,721 | 130 | 0.08 | |||||||||||||||||||||||
Time deposits | 820,834 | 1,961 | 0.97 | 619,087 | 1,687 | 1.08 | 640,269 | 1,464 | 0.93 | |||||||||||||||||||||||
Total | 4,435,129 | 4,464 | 0.41 | 3,611,348 | 3,515 | 0.39 | 3,428,721 | 2,781 | 0.33 | |||||||||||||||||||||||
Securities sold under agreements to repurchase | 78,931 | 40 | 0.21 | 74,661 | 39 | 0.21 | 76,351 | 27 | 0.14 | |||||||||||||||||||||||
FHLB Advances | 322,120 | 1,513 | 1.90 | 261,018 | 1,146 | 1.74 | 250,339 | 1,070 | 1.73 | |||||||||||||||||||||||
Other borrowings | 80,112 | 1,109 | 5.61 | 56,475 | 701 | 4.92 | 56,392 | 653 | 4.70 | |||||||||||||||||||||||
Total interest-bearing liabilities | 4,916,292 | 7,126 | 0.59 | 4,003,502 | 5,401 | 0.54 | 3,811,803 | 4,531 | 0.48 | |||||||||||||||||||||||
Non-interest-bearing deposits | 1,004,673 | 760,552 | 791,036 | |||||||||||||||||||||||||||||
Non-interest-bearing liabilities | 55,031 | 38,880 | 29,399 | |||||||||||||||||||||||||||||
Total liabilities | 5,975,996 | 4,802,934 | 4,632,238 | |||||||||||||||||||||||||||||
Stockholders’ equity | 866,697 | 601,930 | 578,833 | |||||||||||||||||||||||||||||
Total liabilities and equity | $ | 6,842,693 | $ | 5,404,864 | $ | 5,211,071 | ||||||||||||||||||||||||||
Net interest income | $ | 55,711 | $ | 42,505 | $ | 41,483 | ||||||||||||||||||||||||||
Net interest rate spread (3) | 3.58 | % | 3.32 | % | 3.47 | % | ||||||||||||||||||||||||||
Net interest margin (4) | 3.70 | % | 3.42 | % | 3.56 | % | ||||||||||||||||||||||||||
Total cost of deposits (including non-interest-bearing deposits) | 0.33 | % | 0.32 | % | 0.27 | % | ||||||||||||||||||||||||||
(1) | Amounts represent debt and equity securities, including FHLB and Federal Reserve Bank stock, and are recorded at average amortized cost. |
(2) | Amount is net of deferred loan fees, undisbursed loan funds, discounts and premiums and estimated loss allowances and includes loans held for sale and non-performing loans. |
(3) | Net interest rate spread represents the difference between the yield on interest-earning assets and the cost of interest-bearing liabilities. |
(4) | Net interest margin represents net interest income divided by average interest-earning assets. |
14
OceanFirst Financial Corp.
SELECTED QUARTERLY FINANCIAL DATA
(in thousands, except per share amounts)
March 31, | December 31, | September 30, | June 30, | March 31, | ||||||||||||||||
2018 | 2017 | 2017 | 2017 | 2017 | ||||||||||||||||
Selected Financial Condition Data: | ||||||||||||||||||||
Total assets | $ | 7,494,899 | $ | 5,416,006 | $ | 5,383,800 | $ | 5,202,086 | $ | 5,196,203 | ||||||||||
Debt securities available-for-sale, at estimated fair value | 86,114 | 81,581 | 67,133 | 62,154 | 47,104 | |||||||||||||||
Debt securities held-to-maturity, net | 982,857 | 764,062 | 733,983 | 711,650 | 687,098 | |||||||||||||||
Equity investments, at estimated fair value | 9,565 | 8,700 | 8,714 | 8,669 | 8,588 | |||||||||||||||
Restricted equity investments, at cost | 50,418 | 19,724 | 18,472 | 20,358 | 19,253 | |||||||||||||||
Loans receivable, net | 5,413,780 | 3,965,773 | 3,870,109 | 3,868,805 | 3,825,600 | |||||||||||||||
Loans held-for-sale | 167 | 241 | 338 | 168 | 283 | |||||||||||||||
Deposits | 5,907,336 | 4,342,798 | 4,350,259 | 4,176,909 | 4,198,663 | |||||||||||||||
Federal Home Loan Bank advances | 341,646 | 288,691 | 259,186 | 277,541 | 250,021 | |||||||||||||||
Securities sold under agreements to repurchase and other borrowings | 181,822 | 136,187 | 131,792 | 131,673 | 133,798 | |||||||||||||||
Stockholders’ equity | 1,007,460 | 601,941 | 596,140 | 587,189 | 582,543 | |||||||||||||||
For the Three Months Ended, | ||||||||||||||||||||
March 31, | December 31, | September 30, | June 30, | March 31, | ||||||||||||||||
2018 | 2017 | 2017 | 2017 | 2017 | ||||||||||||||||
Selected Operating Data: | ||||||||||||||||||||
Interest income | $ | 62,837 | $ | 47,906 | $ | 48,030 | $ | 46,879 | $ | 46,014 | ||||||||||
Interest expense | 7,126 | 5,401 | 4,974 | 4,705 | 4,531 | |||||||||||||||
Net interest income | 55,711 | 42,505 | 43,056 | 42,174 | 41,483 | |||||||||||||||
Provision for loan losses | 1,371 | 1,415 | 1,165 | 1,165 | 700 | |||||||||||||||
Net interest income after provision for loan losses | 54,340 | 41,090 | 41,891 | 41,009 | 40,783 | |||||||||||||||
Other income | 8,910 | 6,745 | 7,359 | 6,973 | 5,995 | |||||||||||||||
Operating expenses | 38,508 | 26,434 | 27,580 | 28,527 | 29,481 | |||||||||||||||
Branch consolidation (income) expense | (176 | ) | (734 | ) | 1,455 | 5,451 | 33 | |||||||||||||
Merger related expenses | 18,486 | 1,993 | 1,698 | 3,155 | 1,447 | |||||||||||||||
Income before provision for income taxes | 6,432 | 20,142 | 18,517 | 10,849 | 15,817 | |||||||||||||||
Provision for income taxes | 1,005 | 10,186 | 5,700 | 3,170 | 3,799 | |||||||||||||||
Net income | $ | 5,427 | $ | 9,956 | $ | 12,817 | $ | 7,679 | $ | 12,018 | ||||||||||
Diluted earnings per share | $ | 0.12 | $ | 0.30 | $ | 0.39 | $ | 0.23 | $ | 0.36 | ||||||||||
Net accretion/amortization of purchase accounting adjustments included in net interest income | $ | 3,930 | $ | 1,956 | $ | 2,227 | $ | 1,899 | $ | 2,175 | ||||||||||
15
(continued)
At or For the Three Months Ended | |||||||||||||||
March 31, | December 31, | September 30, | June 30, | March 31, | |||||||||||
2018 | 2017 | 2017 | 2017 | 2017 | |||||||||||
Selected Financial Ratios and Other Data(1): | |||||||||||||||
Performance Ratios (Annualized): | |||||||||||||||
Return on average assets (2) | 0.32 | % | 0.73 | % | 0.95 | % | 0.59 | % | 0.94 | % | |||||
Return on average stockholders’ equity (2) | 2.54 | 6.56 | 8.60 | 5.25 | 8.42 | ||||||||||
Return on average tangible stockholders’ equity (2) (3) | 3.80 | 8.89 | 11.74 | 7.19 | 11.50 | ||||||||||
Stockholders' equity to total assets | 13.44 | 11.11 | 11.07 | 11.29 | 11.21 | ||||||||||
Tangible stockholders’ equity to tangible assets (3) | 9.11 | 8.42 | 8.39 | 8.50 | 8.42 | ||||||||||
Net interest rate spread | 3.58 | 3.32 | 3.41 | 3.48 | 3.47 | ||||||||||
Net interest margin | 3.70 | 3.42 | 3.50 | 3.57 | 3.56 | ||||||||||
Operating expenses to average assets (2) | 3.37 | 2.03 | 2.29 | 2.86 | 2.41 | ||||||||||
Efficiency ratio (2) (4) | 87.92 | 56.23 | 60.96 | 75.55 | 65.21 | ||||||||||
Loans to deposits | 91.65 | 91.32 | 88.96 | 92.62 | 91.11 | ||||||||||
16
(continued)
At or For the Three Months Ended | ||||||||||||||||||||
March 31, | December 31, | September 30, | June 30, | March 31, | ||||||||||||||||
2018 | 2017 | 2017 | 2017 | 2017 | ||||||||||||||||
Wealth Management: | ||||||||||||||||||||
Assets under administration | $ | 221,493 | $ | 233,185 | $ | 225,904 | $ | 214,479 | $ | 215,593 | ||||||||||
Per Share Data: | ||||||||||||||||||||
Cash dividends per common share | $ | 0.15 | $ | 0.15 | $ | 0.15 | $ | 0.15 | $ | 0.15 | ||||||||||
Stockholders’ equity per common share at end of period | 20.94 | 18.47 | 18.30 | 18.05 | 17.94 | |||||||||||||||
Tangible stockholders’ equity per common share at end of period (3) | 13.51 | 13.58 | 13.47 | 13.18 | 13.07 | |||||||||||||||
Number of full-service customer facilities: | 76 | 46 | 46 | 51 | 61 | |||||||||||||||
Quarterly Average Balances | ||||||||||||||||||||
Total securities | $ | 1,056,774 | $ | 874,910 | $ | 817,867 | $ | 786,964 | $ | 703,712 | ||||||||||
Loans, receivable, net | 4,950,007 | 3,898,040 | 3,872,351 | 3,840,916 | 3,811,136 | |||||||||||||||
Total interest-earning assets | 6,107,017 | 4,928,937 | 4,873,732 | 4,741,900 | 4,729,013 | |||||||||||||||
Total assets | 6,842,693 | 5,404,864 | 5,334,527 | 5,215,636 | 5,211,071 | |||||||||||||||
Interest-bearing transaction deposits | 3,614,295 | 2,992,261 | 2,914,004 | 2,819,175 | 2,788,452 | |||||||||||||||
Time deposits | 820,834 | 619,087 | 620,308 | 624,020 | 640,269 | |||||||||||||||
Total borrowed funds | 481,163 | 392,154 | 395,439 | 389,321 | 383,082 | |||||||||||||||
Total interest-bearing liabilities | 4,916,292 | 4,003,502 | 3,929,751 | 3,832,516 | 3,811,803 | |||||||||||||||
Non-interest bearing deposits | 1,004,673 | 760,552 | 781,047 | 772,739 | 791,036 | |||||||||||||||
Stockholders’ equity | 866,697 | 601,930 | 591,369 | 587,121 | 578,833 | |||||||||||||||
Total deposits | 5,439,802 | 4,371,900 | 4,315,359 | 4,215,934 | 4,219,757 | |||||||||||||||
Quarterly Yields | ||||||||||||||||||||
Total securities | 2.31 | % | 2.09 | % | 2.07 | % | 2.07 | % | 2.23 | % | ||||||||||
Loans, receivable, net | 4.64 | 4.37 | 4.44 | 4.45 | 4.44 | |||||||||||||||
Total interest-earning assets | 4.17 | 3.86 | 3.91 | 3.97 | 3.95 | |||||||||||||||
Interest-bearing transaction deposits | 0.28 | 0.25 | 0.21 | 0.20 | 0.18 | |||||||||||||||
Time deposits | 0.97 | 1.08 | 1.02 | 0.96 | 0.93 | |||||||||||||||
Total borrowed funds | 2.24 | 1.91 | 1.87 | 1.85 | 1.85 | |||||||||||||||
Total interest-bearing liabilities | 0.59 | 0.54 | 0.50 | 0.49 | 0.48 | |||||||||||||||
Net interest spread | 3.58 | 3.32 | 3.41 | 3.48 | 3.47 | |||||||||||||||
Net interest margin | 3.70 | 3.42 | 3.50 | 3.57 | 3.56 | |||||||||||||||
Total deposits | 0.33 | 0.32 | 0.29 | 0.28 | 0.27 | |||||||||||||||
(1) | With the exception of end of quarter ratios, all ratios are based on average daily balances. |
(2) | Performance ratios for each period include merger related and branch consolidation expenses. Refer to Other Items - Non-GAAP Reconciliation for impact of merger related and branch consolidation expenses. |
(3) | Tangible stockholders’ equity and tangible assets exclude intangible assets relating to goodwill and core deposit intangible. |
(4) | Efficiency ratio represents the ratio of operating expenses to the aggregate of other income and net interest income. |
17
OceanFirst Financial Corp.
OTHER ITEMS
(dollars in thousands, except per share amounts)
NON-GAAP RECONCILIATION
For the Three Months Ended | ||||||||||||||||||||
March 31, | December 31, | September 30, | June 30, | March 31, | ||||||||||||||||
2018 | 2017 | 2017 | 2017 | 2017 | ||||||||||||||||
Core earnings: | ||||||||||||||||||||
Net income | $ | 5,427 | $ | 9,956 | $ | 12,817 | $ | 7,679 | $ | 12,018 | ||||||||||
Add: Merger related expenses | 18,486 | 1,993 | 1,698 | 3,155 | 1,447 | |||||||||||||||
Branch consolidation expenses | (176 | ) | (734 | ) | 1,455 | 5,451 | 33 | |||||||||||||
Accelerated stock award expense | — | — | — | — | 242 | |||||||||||||||
Income tax expense related to Tax Reform | — | 3,643 | — | — | — | |||||||||||||||
Less: Income tax (expense) benefit on items | (3,664 | ) | 2 | (1,084 | ) | (3,012 | ) | (587 | ) | |||||||||||
Core earnings | $ | 20,073 | $ | 14,860 | $ | 14,886 | $ | 13,273 | $ | 13,153 | ||||||||||
Core diluted earnings per share | $ | 0.45 | $ | 0.45 | $ | 0.45 | $ | 0.40 | $ | 0.40 | ||||||||||
Core ratios (Annualized): | ||||||||||||||||||||
Return on average assets | 1.19 | % | 1.09 | % | 1.11 | % | 1.02 | % | 1.02 | % | ||||||||||
Return on average tangible stockholders’ equity | 14.07 | 13.27 | 13.63 | 12.42 | 12.56 | |||||||||||||||
Efficiency ratio | 59.59 | 53.67 | 54.71 | 58.04 | 61.58 | |||||||||||||||
COMPUTATION OF TOTAL TANGIBLE EQUITY TO TOTAL TANGIBLE ASSETS
March 31, | December 31, | September 30, | June 30, | March 31, | ||||||||||||||||
2018 | 2017 | 2017 | 2017 | 2017 | ||||||||||||||||
Total stockholders’ equity | $ | 1,007,460 | $ | 601,941 | $ | 596,140 | $ | 587,189 | $ | 582,543 | ||||||||||
Less: | ||||||||||||||||||||
Goodwill | 337,519 | 150,501 | 148,134 | 148,433 | 147,815 | |||||||||||||||
Core deposit intangible | 19,950 | 8,885 | 9,380 | 9,887 | 10,400 | |||||||||||||||
Tangible stockholders’ equity | $ | 649,991 | $ | 442,555 | $ | 438,626 | $ | 428,869 | $ | 424,328 | ||||||||||
Total assets | $ | 7,494,899 | $ | 5,416,006 | $ | 5,383,800 | $ | 5,202,086 | $ | 5,196,203 | ||||||||||
Less: | ||||||||||||||||||||
Goodwill | 337,519 | 150,501 | 148,134 | 148,433 | 147,815 | |||||||||||||||
Core deposit intangible | 19,950 | 8,885 | 9,380 | 9,887 | 10,400 | |||||||||||||||
Tangible assets | $ | 7,137,430 | $ | 5,256,620 | $ | 5,226,286 | $ | 5,043,766 | $ | 5,037,988 | ||||||||||
Tangible stockholders’ equity to tangible assets | 9.11 | % | 8.42 | % | 8.39 | % | 8.50 | % | 8.42 | % | ||||||||||
18
(continued)
ACQUISITION DATE - FAIR VALUE BALANCE SHEET
The following table summarizes the estimated fair values of the assets acquired and the liabilities assumed at the date of the acquisition for Sun, net of the total consideration paid (in thousands):
At January 31, 2018 | |||||||||||
Sun Book Value | Purchase Accounting Adjustments | Estimated Fair Value | |||||||||
Total Purchase Price: | $ | 474,930 | |||||||||
Assets acquired: | |||||||||||
Cash and cash equivalents | $ | 68,632 | $ | — | $ | 68,632 | |||||
Securities and Federal Home Loan Bank Stock | 254,522 | — | 254,522 | ||||||||
Loans | 1,541,868 | (23,921 | ) | 1,517,947 | |||||||
Accrued interest receivable | 5,621 | — | 5,621 | ||||||||
Bank Owned Life Insurance | 85,238 | — | 85,238 | ||||||||
Deferred tax asset | 55,710 | 2,642 | 58,352 | ||||||||
Other assets | 49,561 | (7,031 | ) | 42,530 | |||||||
Core deposit intangible | — | 11,897 | 11,897 | ||||||||
Total assets acquired | 2,061,152 | (16,413 | ) | 2,044,739 | |||||||
Liabilities assumed: | |||||||||||
Deposits | (1,614,910 | ) | (1,163 | ) | (1,616,073 | ) | |||||
Borrowings | (142,567 | ) | 14,820 | (127,747 | ) | ||||||
Other liabilities | (14,372 | ) | 1,365 | (13,007 | ) | ||||||
Total liabilities assumed | (1,771,849 | ) | 15,022 | (1,756,827 | ) | ||||||
Net assets acquired | $ | 289,303 | $ | (1,391 | ) | $ | 287,912 | ||||
Goodwill recorded in the merger | $ | 187,018 | |||||||||
The calculation of goodwill is subject to change for up to one year after the date of acquisition as additional information relative to the closing date estimates and uncertainties become available. As the Company finalizes its review of the acquired assets and liabilities, certain adjustments to the recorded carrying values may be required.
19